Regulation by deviation: Agencies get around public input requirement before rule-making

By Alan Chvotkin – Executive Vice President and Counsel, Professional Services Council, Washington Business Journal

Dec 10, 2012, 1:15pm ESTUpdatedDec 10, 2012, 1:58pm EST

Most of the time agencies are required to publish regulations for “notice and comment” in the Federal Register 60 days before putting them into effect. However, sometimes agencies face a statutory or other deadline for issuing procurement regulations and will publish an interim rule while still requesting comments or issue a “class deviation” that does not provide for public input until subsequent rules are issued.

In both of these procedures, the ability of public comments to influence an agency’s subsequent regulatory action is significantly diminished because the agency has already internally debated, coordinated and then decided how to implement a requirement and published its preferred regulatory solution.

Many times the interim rule or deviation process appears to be a substitute for following the notice and comment process. It could be months or longer before these rules are published for public comment.

Often, the first time contractors are aware that the rules have changed through a deviation is when revised contract provisions or clauses appear in solicitations. In 2012, the Defense Department used class deviations 17 times, covering a wide range of issues.

To address this increasingly prevalent problem, the Professional Services Council is developing a proposal we plan to submit to the Office of Federal Procurement Policy — and, if necessary, to Congress — in early 2013.

Our proposal will simply require the Federal Acquisition Regulatory Council, the Defense Acquisition Regulatory Council or any acquisition agency that issues a deviation from the FAR or DFARS to publish that acquisition-policy deviation in the Federal Register and on the agency’s website section relating to “doing business with the agency” within five business days of the effective date of the deviation unless there are compelling reasons why the time frame — but not the requirement for publication — cannot be met.

While reviewing the content of the Federal Register every day is a task few of us undertake, there are enough Federal Register monitors to test whether this action by itself would be an effective public disclosure technique.

Additionally, this simple element of transparency might generate public responses that provide useful information to agencies before any subsequent regulatory actions while also keeping contractors informed of their evolving responsibilities when doing business with the federal government.

Imagine how implementation of the troubled System for Acquisition Management (SAM) could have been improved if the government had published a notice for public comments when it issued a class deviation to delay the requirement for agencies and contractors to use the database for registering to do business with federal agencies.

Altering the way companies register to do business with the government has a significant impact on both the acquisition agencies and the contractors. Allowing comments by those who must implement the process and abide by it could smooth the situation.

In this case, the deviation excused agencies and contractors from using SAM because issues related to the transition of various legacy systems into the new system precluded compliance with the new registration process, but it stopped there.

Given the potential benefits to be had and the uncertainty to be avoided by adopting the Professional Services Council’s publication proposal, it’s worth this little experiment.

Alan Chvotkin is executive vice president and counsel of the Professional Services Council, a trade association of the government professional and technical services industry. He is also a founding member of the federal contracting industry’s Acquisition Reform Working Group.

By Alan Chvotkin – Executive Vice President and Counsel, Professional Services Council, Washington Business Journal